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Praise for Breakout Strategies for Emerging Markets

“ If every global marketing company applied the principles in this new and important book, I have no doubt that millions of consumers in emerging countries will achieve a higher standard of living and the global marketing companies will all achieve increased sales and profitability.”

Philip Kotler, S. C. Johnson & Son Distinguished Professor of Marketing, Kellogg School of Management, Northwestern University

“ Sheth, Sinha, and Shah have developed a highly practical and comprehensive guide to navigating the complex challenges and achieving growth in emerging markets. Their book is a must read for anybody who is working in or wanting to enter emerging markets.”

Cynthia Kantor, Senior Executive, Global Product Line Leader, GE Power Services

“ This is an essential compass for navigating the enormous possibilities and the many pitfalls of emerging markets. This is a well-researched and thoughtful guide-book to the challenges of converting nonusers to users at scale. The authors emphasize an outside-in approach that puts the reader in the shoes, boots, and sandals of the poten-tial consumers before taking action.”

George Day, Geoffrey T. Boisi Professor Emeritus, Wharton School of Business, University of Pennsylvania

“ Having had the extensive experience of leading a global division operating in over 100 countries, I know first-hand the challenges companies face when they enter emerging markets. The authors have uniquely developed an approach that will prove to be beneficial for those seeking success in emerging markets.”

Javier C. Goizueta, Retired Vice President, The Coca Cola Company and President of the Global McDonald’s Division

“ Despite the volatility in markets, which is greater for emerging markets, the fact is that every multinational company has to master the nuances of working in the differ-ent emerging markets. The variance between emerging markets is greater than that observed between different developed markets. As a result, adaptation across the emerging markets becomes important for success. The book provides an excellent approach for doing so.”

Nirmalya Kumar, Member—Group Executive Council at Tata Sons, Visiting Professor of Marketing at London Business School and Distinguished Fellow Emerging Markets Institute, INSEAD at Singapore

“ Jagdish Sheth, one of the world’s leading experts on emerging markets, has done it again! In Breakout Strategies, he and his colleagues offer a practical road map for how to gain traction and achieve rapid growth in emerging economies. The book puts flesh on the bones of the 4 A’s model that Sheth pioneered some years back. It is a treasure trove of practical strategies and tactics illustrated with numerous real-world exam-ples. It fills a void and is destined to become a classic on the topic.”

Ravi Ramamurti, D’Amore-McKim Distinguished Professor of International Business, and Director, Center for Emerging Markets, Northeastern University

“ This book is a refreshing combination of strategic thought and practical application for operating in emerging markets, applied comprehensively and made robust with examples from Africa, Asia, and Latin America. Having lived and worked in each of these geographies, I see great value in the frameworks the authors have created to identify and commercialize opportunities in a responsible manner.”

Vinita Bali, Global Business Leader, formerly with Cadbury Schweppes, The Coca-Cola Company, and Britannia Industries Ltd.

“ Jagdish Sheth, Mona Sinha, and Reshma Shah have created an all-encompassing step-by-step model for engaging relevant stakeholders in emerging markets such as leaders, communities, employees, suppliers, and, of course, customers in their book, Breakout Strategies for Emerging Markets. Such a treatment of emerging markets takes this book from the common way of doing business—sourcing from emerging markets or selling commoditized products in emerging markets—to a level of engage-ment that benefits both emerging markets and those who engage with them. This is a sustainable and long-term viable way of strategizing about emerging markets.”

Tomas Hult, Professor and Byington Endowed Chair in International Business, Broad College of Business, Michigan State University, and Executive Director, Academy of International Business

“ A must-read book for companies that are searching for growth opportunities. This book very succinctly articulates how to tap into market opportunities in developing/emerging markets. Concepts like Breakout Strategies and 4 A’s marketing are simple yet very powerful and pragmatic concepts that companies can benefit from. This book is a brilliant blend of simple frameworks and well-articulated examples that brings the story to life very effectively and another marketing blockbuster on the anvil from Dr. Sheth.”

Stan Sthanunathan, Executive Vice President, Consumer and Market Insights, Unilever

“ Despite the recent economic slowdown in China and some other emerging markets (EM), it is indisputable that companies everywhere still need to sell much more to these EM consumers if they wish to grow. The framework and examples in this book should be of great help. Not only is it chock full of terrific insights and examples—it weaves these together into a new and very useful conceptual framework that has great managerial relevance. It brings together many new and useful points about how to sell to low (bottom of the pyramid) and middle income consumers, and the crucial youth market, in a multitude of geographical locales—not just China and India but also Latin America and Africa. Marketers everywhere need to read this book.”

Rajeev Batra, Sebastian S. Kresge Professor of Marketing, Ross School of Business, University of Michigan

“ A ‘must read’ book for managers seeking growth in emerging markets! Breakout strat-egies are new, large-scale ways to convert nonusers to users. The 4 A’s provide a powerful framework that starts from what a market offers: culture, values, systems, and needs. Companies grow by leveraging what the market lacks: technologies, pro-cesses, products, and brands. The authors’ offer compelling stories about how compa-nies have overcome challenges to succeed in Africa, Asia, the Middle East, Europe, and South America.”

Dr. Ruth N. Bolton, Professor of Marketing, W.P. Carey School of Business, Arizona State University

“ Never have I seen the underlying drivers of success in emerging markets uncovered and communicated more effectively. The consumer and environmental factors dis-cussed are the most often overlooked when setting strategy in emerging markets. The strategies advanced are real-world applicable and capture critical learning for success in emerging markets.”

Mike Shattuck, Former President Focus Brands International and Owner, Global Franchising and Brand Building

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Breakout Strategies for Emerging Markets


Breakout Strategies for Emerging MarketsBusiness and Marketing Tactics

for Achieving Growth

Jagdish N. Sheth Mona Sinha

Reshma Shah

Associate Editor: Kim BoedigheimerSenior Marketing Manager: Stephane NakibCover Designer: Chuti PrasertsithManaging Editor: Sandra SchroederSenior Project Editor: Tracey CroomProject Manager: Maureen ForysCopy Editor: Rebecca RiderProofreader: Nancy PetersonIndexer: Valerie PerryCompositors: Maureen Forys and Kate Kaminski

Published by Pearson Education, Inc.Old Tappan, New Jersey 07675

© 2016 by Jagdish N. Sheth, Mona Sinha and Reshma Shah

For information about buying this title in bulk quantities, or for special sales opportunities (which may include electronic versions; custom cover designs; and content particular to your business, training goals, marketing focus, or branding interests), please contact our corporate sales department at [email protected] or (800) 382-3419.

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First Printing June 2016

ISBN-10: 0-13-443495-1ISBN-13: 978-0-13-443495-7

Pearson Education LTD.Pearson Education Australia PTY, LimitedPearson Education Singapore, Pte. Ltd.Pearson Education Asia, Ltd.Pearson Education Canada, Ltd.Pearson Educación de Mexico, S.A. de C.V. Pearson Education—JapanPearson Education Malaysia, Pte. Ltd.

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To my grandchildren (Rehna, Maya, Anya, and Arya) whose love keeps me going.

—Jagdish Sheth

To my three special people, Nuri, Sridhar, and Papa for celebrating your milestone birthdays this year.

—Mona Sinha

To my parents, Jagdish and Madhuri Sheth, for showing me the world and enabling me to appreciate all its diverse aspects.

—Reshma Shah


Contents

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiv

Chapter 1 Converting Nonusers to Users . . . . . . . . . . . . . . . . . . . . . . . 1

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Chapter 2 Creating Functional Fusion . . . . . . . . . . . . . . . . . . . . . . . . 17

Adapting to Climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Considering Genetic Differences . . . . . . . . . . . . . . . . . . . . . 21Overcoming Infrastructural Limitations . . . . . . . . . . . . . . . . 23Incorporating Local Essence . . . . . . . . . . . . . . . . . . . . . . . . . 24Aligning to Regulatory Requirements. . . . . . . . . . . . . . . . . . 28Capital Markets and Banking in Emerging Markets . . . . . . 29References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Chapter 3 Designing Cultural Fusion . . . . . . . . . . . . . . . . . . . . . . . . 37

Incorporating Traditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Using Local Languages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Considering Social Norms . . . . . . . . . . . . . . . . . . . . . . . . . . 45Respecting Faith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Understanding Sensory Preferences . . . . . . . . . . . . . . . . . . 49References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Chapter 4 Democratizing the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Reducing Economic Barriers to Purchase . . . . . . . . . . . . . . 59Overcoming Noneconomic Obstacles

to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Achieving Reverse Innovation . . . . . . . . . . . . . . . . . . . . . . . . 68Extending Product Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Developing Creative Financing. . . . . . . . . . . . . . . . . . . . . . . 72References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

xii Breakout StrategieS for emerging marketS

Chapter 5 Upscaling the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Adding or Changing Packaging . . . . . . . . . . . . . . . . . . . . . . 82Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Enhancing Services and Benefits . . . . . . . . . . . . . . . . . . . . . 86Reversing the Brand Lifecycle . . . . . . . . . . . . . . . . . . . . . . . 89Leveraging the Country of Origin . . . . . . . . . . . . . . . . . . . . . 92References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Chapter 6 Managing Reach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Adapting to Traditional Channels . . . . . . . . . . . . . . . . . . . . 100Navigating Indigenous Channels . . . . . . . . . . . . . . . . . . . . 102Developing Channel Partnerships. . . . . . . . . . . . . . . . . . . . 105Building for Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Managing Channel Ownership . . . . . . . . . . . . . . . . . . . . . . 114References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Chapter 7 Reinventing Reach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Modernizing Retailing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126Setting Up E-Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Accessing Self-Service Technologies . . . . . . . . . . . . . . . . . . 132Enabling Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133Providing Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Chapter 8 Building Brand Identity . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Establishing Product Knowledge . . . . . . . . . . . . . . . . . . . . 150Identifying Sources of Communication . . . . . . . . . . . . . . . 153Developing Appropriate Messaging . . . . . . . . . . . . . . . . . . 157Using Traditional Channels of Communication . . . . . . . . . 165Leveraging New and Unconventional Media . . . . . . . . . . 167References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

Chapter 9 Engaging Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 175

Educating Consumers and Markets . . . . . . . . . . . . . . . . . . 176Involving Communities and Leaders . . . . . . . . . . . . . . . . . 179Engaging Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181Co-opting Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184Developing Partnerships with Public, Private, and

Nonprofit Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . 187References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

ContentS xiii

Chapter 10 Connecting the Dots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

Overcoming Emerging Market Challenges . . . . . . . . . . . . 204The Way Forward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209References: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 About the Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225

Acknowledgments

This book has been inspired by the dozens of companies in emerg-ing markets all over the world whose stories we have had the privilege of sharing. There were many more stories that we wish we could have shared. We gratefully acknowledge our many contributors whose pro-files are at the back of this book. We also thank our student assistants, Alaina D’Anzi, Ebenezer Osunlalu, and Innocent Djiofack for their help with the in-depth research this book required. In addition, our thanks to Aarya Budhiraja (BBA research assistant at Emory Univer-sity) and Anthony Koschmann (PhD candidate at Emory University) for assisting in our research. Special thanks to Isha Edwards for edit-ing and organizing the citations for each chapter. We are also grate-ful to Nicole Smith, Jagdish Sheth’s personal assistant, for providing administrative support for the book. Finally, we are deeply apprecia-tive of the support and guidance from the team at Pearson including Jeanne Levine and Kim Boedigheimer, and the team at Happenstance Type-O-Rama including Maureen Forys, Kate Kaminski, Rebecca Rider, and Nancy Peterson.

Breakout Strategies for Emerging Markets


1

1Converting Nonusers to Users

Emerging markets offer the biggest growth opportunity in the history of capitalism. Unfazed by the ups and downs of the global economy, many former developing nations have transformed into lucrative markets with potential annual consumption estimated at 30 trillion USD (U.S. dollars) by 2025 (Atsmon et al. 2012). Eyeing nearly 10 trillion USD of annual revenue from just India and China, businesses have been spending billions of dollars to understand and market to consumers in these emerging economies (Silverstein et al. 2012). Emerging economies are not only transforming marketing, but they are also transforming markets all over the world by attracting multinationals, shoring up domestic firms, and launching local brands onto the global stage.

The case for entering and competing in emerging markets is cer-tainly a strong one. As The Coca-Cola Company’s CEO Muhtar Kent concisely explained, “About 3.5 percent to 4 percent of the population of the world lives in the U.S., and we’re a consumer goods company. So we sell where the people are. It’s just math” (Nisen 2012). Further, as affluent nations aged, consumption levels and patterns changed, and consequently companies began to look for growth in emerging markets that were getting liberalized. No longer were they just ex-colonies with predominantly rural, agrarian, bottom-of-the-pyramid (BoP) consumers, but they also comprised a burgeoning middle class and a growing affluent class that was becoming increasingly brand conscious and driving growth in consumption (Sheth 2011).

Multinationals were not prepared for heterogeneity when they first entered these new markets in the early ’80s. With almost 50 percent of consumers at the BoP and a fragmented market of largely unbranded domestic products from a large number of small enterprises, many

2 Breakout StrategieS for emerging marketS

emerging markets were similar to preindustrialization-era farming economies. Vast swathes of the population were illiterate and tradi-tional means of communication were ineffective in reaching them, which meant that marketers often needed to rethink their marketing mix. Many parts of these markets lacked or had poor quality of even basic infrastructure, such as electricity, clean drinking water, banking, telecommunication, transportation, and communications. Resources were chronically in shortage. Branded goods and services were rela-tively new entrants in emerging markets, which even now tend to be largely dominated by unbranded regional or local commodities. Gov-ernance in these markets is influenced predominantly by sociopolitical institutions based on religion, government, local community, busi-ness groups, or nongovernmental organizations, leaving new entrants struggling to navigate complex and unfamiliar regulatory structures (Sheth 2011). Further, even though consumers have accepted many aspects of global brands, they also show strong preferences for their traditions and cultures. Multinationals need to be attuned to socio-cultural–driven heterogeneities that frustrate unquestioned accep-tance of global brands (Strizhakova, Coulter, and Price 2012).

The conceptual foundations as well as the practice of marketing are predominantly based on the study of branded goods and services from the developed parts of the Western world. However, in emerg-ing markets, an estimated 65 percent of consumption is unbranded and much remains unknown about how these consumers and mar-kets are different from or similar to developed ones (Sheth 2011). Douglas Daft, who preceded Muhtar Kent as CEO of Coca-Cola from 2000 to 2004, noted that Coca-Cola’s standardization strategy had run its course, “The world had changed, and we had not. The world was demanding greater flexibility, responsiveness, and local sensitivity, while we were further consolidating decision-making and standardizing our practices” (Ball 2003). Companies like Unilever had successfully taken a long-term position in emerging markets, even when they were not yet in a growth surge. Eventually these companies became so ingrained in the fabric of local society that they were perceived more as local rather than global companies. How-ever, for most companies, their foray into emerging markets remains a hit-or-miss experience with as many failures as successes. Thus, the next big evolutionary step of “going global” is not just “going local”

Chapter1 • Convertingnonuserstousers 3

but seamlessly blending elements from the developing and devel-oped world.

Despite the realization that entering emerging markets is a com-petitive imperative and requires a fair amount of rethinking, multina-tionals, as well as local companies, foraying into branded competition falter because they lack an explanatory framework and practical guidelines. Given that the size and unique consumption needs of emerging markets require investments running into billions of U.S. dollars, the failure to understand the key to succeeding in these mar-kets is a critical and significant knowledge gap in business strategy. While recently much attention has focused on what is wrong with developing or emerging nations and the unreliability of these nations as investment destinations, we focus instead on what is right—the opportunities that exist, and those that can be created despite or per-haps even because of the challenges in these markets. We examine not just how brands overcome challenges, but also why those actions help them succeed. We propose breaking out of traditional marketing thought, which is normally centered on differentiation, segmentation, positioning, and the marketing mix to compete against other branded goods and services, to propose new ways of marketing aimed at con-verting the large numbers of non users in emerging markets to users.

The first step in this process is to acknowledge that as standards of living rise across the world, emerging market consumers are increas-ingly exposed to products previously used in developed nations or restricted to higher socio-economic groups. The obvious examples include cell phones and flat screen televisions, as well as basic prod-ucts, such as shampoo and detergent. But, simply bringing in Western products, or even adapting them to emerging markets, is not sufficient because getting consumers to use products that they have not previ-ously considered requires more than just making the products avail-able. In fact, most products sold in emerging markets are typically unpackaged and unbranded so there is great opportunity in branding and organizing them.

Breakout marketing is the way companies can use what a given market offers (e.g., culture, values, systems, and needs) and intro-duce what it lacks (e.g., technologies, methods/processes, prod-ucts, and brands), thereby transforming both themselves as well as the market. Notably, although brands usually begin their journey in


emerging markets by converting light users into heavy users, the great market expansion that marketers aspire to really comes from large-scale conversion of nonusers to users. Nonusers include those who do not consider the product category itself and also those who may be accustomed to the category but have previously used unbranded or noncommercial options. Consumption of unbranded products in emerging markets offers a huge, untapped potential to marketers, which can be leveraged if companies succeed in providing access, cre-ating acceptability and building awareness at affordable price points.

Our in-depth observations of companies in emerging markets across the world led us to develop the eight key breakout strate-gies that we recommend in this book. These strategies are based on four key criteria, coined the 4 A’s of Marketing and developed into a framework by Jagdish Sheth and Rajendra Sisodia (2012) after they spent years watching and learning how companies succeed. The 4 A’s framework, comprising acceptability, affordability, accessibility, and awareness, combines a theoretical approach with the actual practice of marketing. More importantly, it is an outside-in customer-centric approach that begins with customer benefits instead of the inside-out product-centric approach that starts with firms’ actions, objectives, and the traditional marketing mix. Marketers can use this framework to align their actions with the four essential values that customers seek. These values can be summarized as follows:

1. Acceptability. The extent to which the firms’ total product of-fering meets and exceeds customer expectations. Acceptability has two key dimensions—functional acceptability and psycho-logical acceptability.

2. Affordability. The extent to which customers in the target market are able and willing to pay the product’s price. Afford-ability can also be characterized by two dimensions—economic affordability or the ability to pay, and psychological affordability or the willingness to pay.

3. Accessibility. The extent to which customers are able to read-ily acquire and use the product. Again, there are two dimen-sions to accessibility—the availability of goods and services, and their convenience.


4. Awareness. The extent to which customers are informed re-garding product characteristics, persuaded to try a new product or service, and, if applicable, reminded to repurchase it. Aware-ness includes both brand awareness and product knowledge.

The 4 A’s framework helps to eliminate much of the guesswork that goes into marketing, because it lets managers work with a set of objectives that are focused on the consumer versus the marketer. This framework derives from a customer-value perspective based on the four distinct roles that customers play in the market: seekers, selec-tors, payers, and users. For a marketing program to succeed, it must achieve high marks for all four A’s, using a blend of marketing and nonmarketing resources. The 4 A’s framework helps companies cre-ate value for customers by identifying what they want and need, as well as by uncovering new wants and needs. For example, none of us knew we needed an iPad until Apple created it.

We traversed a creative path between this theoretical frame-work and the practice of marketing in an emerging-market context in order to develop our eight strategies. Our strategies will help com-panies build awareness among consumers as well as other stakehold-ers and gain acceptability for products and services by pricing them affordably and making them convenient to access. This book repre-sents our combined years of experience in marketing, including in emerging markets. We use insights from global primary and second-ary research; our work in academia, corporate practice, consulting, and case-writing; as well as our numerous presentations to industry audiences all over the world. Our brand stories range from Africa to Asia, passing through the Middle East to reach western Asia. We also step briefly into Europe and stretch down into South America with our examples. By using a story-telling approach to illustrate the suc-cess of these eight strategies, we provide real-world evidence for cre-ative and contextual marketing in emerging markets. We hope that by bringing you the voices of numerous organizations and managers, we show you a way to grasp an unparalleled opportunity offered in the history of the world–the ability to transform the practice of mar-keting by including scores of new consumers from across the world, and thereby the ability to write new rules to drive strategic thought in marketing. According to the organizing framework developed at


the end of this chapter in Figure 1, this book is laid out so that each chapter describes a breakout strategy that operates within the context of the 4 A’s framework. We offer two strategies for each A of market-ing, and each strategy provides paths by which companies can convert nonusers to users.

The strategies in Chapters 2 and 3 discuss ways of creating acceptability by being mindful of special functionality needs and adherence to cultural norms. Chapters 4 and 5 offer strategies for affordable solutions, both at the base and at the top of the pyramid. Chapters 6 and 7 are focused on providing accessibility by leverag-ing existing distribution set ups and introducing new ones. Finally, Chapters 8 and 9 focus on creating awareness by building brand identity and then going beyond a customer focus to serve the needs of various stakeholders, such as supply chain members, communities, and government and nongovernment agencies. All these strategies are primarily aimed at expanding the market by converting nonusers to users. Here’s a snapshot of what the chapters ahead have in store.

Chapter 2, titled “Creating Functional Fusion,” speaks to the highly heterogeneous needs and expectations across different emerg-ing markets; these are based on factors like local climate and the genetic makeup of local people that necessitate functional adaptation to make products acceptable (Sheth 2007). For example, the hot and dusty climate of northern India required Panasonic to rethink its air conditioning systems. Variations in skin types and hair texture com-pel product adaptations in several markets in Asia. Similarly, genetic and health predispositions also require product reformulation. For example, over 90 percent of Chinese consumers are lactose intoler-ant, so Cadbury Schweppes PLC had to reformulate its chocolates with less milk and, as a result, they also had to use less cocoa to avoid a bitter taste.

The lack of critical infrastructure, such as water and electricity, in many emerging markets also calls for out-of-the-box thinking for product modifications or innovations. For example, Whirlpool Cor-poration’s washing machines for such regions are fully automatic, top-loading machines that restart the washing cycle from the point that a power outage occurred instead of restarting from the beginning of the cycle. They also conserve by reusing water. Companies incorporate local ingredients/components for cost efficiencies. This is especially


the case for food companies since ingredients are prone to spoilage if the supply chain is too long. Often companies retain/employ local talent for better leveraging on-the-ground knowledge. The ability to negotiate regulatory requirements of a country may also compel product and process modifications. IKEA’s current domestic sourcing in China and future sourcing as it contemplates entry into India are based on government regulations.

In Chapter 3, “Designing Cultural Fusion,” we turn our attention to making products culturally acceptable. If products or services do not take the totality of the customers’ lived experience into account, then despite superior functional performance, they may fail due to lack of psychological acceptability. In other words, cultural fusion involves closing the gap between the marketing practices of advanced and emerging markets to improve their psychological acceptance. Cultural fusion includes a holistic view of consumers’ local traditions, the history of their consumption experiences, and their aspirations to be contemporary.

Food and beverage companies have been at the forefront of cultural fusion by adapting their menus to local palates. Kentucky Fried Chicken’s (KFC’s) strategy in China reflects their focus on psychological acceptance. Their menu includes items specifically created for the unique tastes and preferences of Chinese consum-ers. Extensive market research led to the inclusion of lo mein and other noodle dishes that would not typically be found at KFCs in other countries, but several items incorporated Western elements as well, creating fusion cuisine. Disney’s feng shui–influenced theme park design for Hong Kong is also an example of fusion because they leveraged aspects of local culture to make their brand more relevant to the local culture while they also retained Western design ele-ments. Integrating new product categories into the local consump-tion culture often involves community-level assimilation to minimize the social risk of new product adoption. An example of this is Sula Vineyard’s marketing efforts in India where they built the wine mar-ket from scratch by creating a wine culture and lifestyle that was a whole new concept for the Indian market. Adapting products to accommodate religion- or faith-based considerations is an important element of psychological acceptance. The rise of Islamic banking, which reflects an ingenuous combination of Western banking and


the religious considerations of Islam, reflects the power of cultural fusion.

In Chapter 4, we move on to affordability considerations. Titled “Democratizing the Offer,” this chapter delves into ways to inno-vate to achieve low-priced, affordable solutions. Marketers have long acknowledged that, despite a rise in per capita income, consumers in emerging markets have far lower disposable incomes than consumers in developed economies, even after accounting for purchasing power parity. However, determining creative ways of making purchases financially feasible for the BoP can be profitable for companies while also drawing millions into the consumption fold (Prahalad 2006). These large and attractive markets can be targeted by addressing both economic affordability, that is, the ability to pay, and psychological ability, that is, the willingness to pay (Sheth and Sisodia 2012).

Product development in emerging markets is often spurred by the needs of low-income consumers. For example, in Argentina, Sistema Ser/CEGIN transformed healthcare at the BoP by offering a subscription model. Similarly, GlaxoSmithKline came up with vac-cines at multiple price levels for a range of middle- to low-income Latin American countries. Going beyond price, Capitec Bank began offering unsecured credit in South Africa, thereby drawing in non-users by helping them overcome noneconomic barriers to purchase. Such products often find markets for similar low-income consumers or those with reduced needs in the developed world; this concept is called reverse innovation, and was made famous by General Elec-tric (GE). Levi Strauss & Co. created low-priced Denizen jeans for China, which were eventually launched in the United States, and the brand is now doing very well across segments. Such innovation oppor-tunities are a way for companies to develop critical new skills that are applicable in affluent countries as well.

Managing products throughout their lifecycle is another way of offering affordable solutions. This includes options such as facilitating the sale of used goods, whether in an indigenous street market for, say, home appliances or clothes, or at a higher end, like Manheim’s auction-based market for used cars. Creative financing solutions are another way of democratizing the offer, such as by offering small busi-ness financing or even by offering the core product for free and earn-ing revenue with add-on services or advertising.


In Chapter 5, we present an idea contrary to popular perceptions that emerging market consumers only want low-priced products. In “Upscaling the Offer,” we draw attention to the changing shape of the income pyramid in emerging markets as the ranks of the middle class swell and turn the triangle into a diamond. The neo-rich segments in these countries are expanding and creating an opportunity for luxury players to make an impact as well. The Asia-Pacific region is estimated to have more high-net-worth people than North America, though the total value of wealth held in the United States may be higher (Loren-zetti 2015). Thus, emerging markets present huge financial opportu-nities for companies that can serve upper echelon consumers.

Moreover, affordability means something is within one’s financial means, so the large and growing segments of middle class consum-ers in emerging markets imply that brands can also be “upscaled” to match the increasing paying capacity of their customers. It is worth noting that many products and brands that are nonluxury in the West are considered luxury products in emerging markets. So as consum-ers upgrade their consumption, introducing new products and brands to them opens up exciting new prospects for many companies. Since most consumption in emerging markets is of unpackaged, unbranded goods, simply adding packaging, as in the case of Moroccan dates, can transform a commodity into a well-recognized brand that can dis-play/position its country of origin positively. In addition to the inclu-sion of packaging, accurately positioning, as well as adding services and benefits, adds to the value proposition. Brands like Sundrop in India or Rapoo in China have been able to leverage their success in low-price segments to eventually enter high-priced, value-added seg-ments, effectively reversing their brand lifecycle. Higher prices can become attractive to an affluent audience in emerging markets by emphasizing the brand’s country of origin, which creates a halo effect if it is from the developed world. Several foreign luxury brands have discovered this phenomenon and feature their products on websites like Alibaba’s Tmall in China.

In Chapter 6, we present marketers with a strategy we title “Managing Reach” where we suggest ways of leveraging traditionally available distribution methods to increase access. Accessibility refers to the extent to which customers are able to easily acquire and use the product. Not only does this include ensuring the right amount


of product availability (it is neither under- nor overproduced), but it must also be convenient to access the product so the time and effort required to get the product is reduced (Sheth and Sisodia 2012). Dis-tribution is an important challenge for companies to overcome in pro-viding accessibility, given that most emerging markets often lack basic infrastructure, have multiple middle men, and face regulatory as well as scalability hurdles that hamper the physical movement of products to end consumers, especially at the BoP.

Chapter 6 also notes the many existing distribution systems in emerging markets that companies need to adapt to in order to cre-ate access. Often companies find that their traditional conceptualiza-tion of retailing must change because typical neighborhood stores can just be homes that double as stores with living areas at the back and store counters up front. There are also indigenous channels like street markets, pushcart vendors, and traditional bazaars. Some of these channels such as the Gold Souk in Dubai are fairly organized and increasingly famous international jewelers are setting up shop there. Another way of expanding reach is by collaborating with a vari-ety of partners. Setting up or improving distribution systems in these countries often require partnerships similar to the way Sberbank of Russia partnered with its employees to transform its service quality and delivery. Similarly, SANY in China partnered with its distribu-tors to shoulder some of the risks involved in marketing a relatively new brand. When making channel ownership decisions, businesses must consider the source and level of control they desire, like the way Grupo Los Grobo in Argentina rethought land ownership in order to transform the agro-supply chain.

In Chapter 7, titled “Reinventing Reach,” we propose using tech-nology and other innovative ways for reaching out to consumers. Mod-ern retail formats, like China Resources Vanguard Co. in China, and co-exists with “old” (for the developed world) technologies like vend-ing machines and mobile vans are being used in interesting ways and for unusual products. For example, the South African Revenue Ser-vice (SARS) used mobile vans that are being used to fan out to rural areas for increasing citizens’ compliance with tax filing norms. Like-wise, ATMs in Africa or India are like multipurpose kiosks dispensing phone recharges as well as agriculture and weather information.


E-commerce websites like Alibaba are huge online market-places in the business-to-consumer (B2C) as well as the business-to-business (B2B) space, whereas OLX, which offers free classifieds, has first-mover advantage over Craigslist in emerging markets. Online payment systems such as M-Pesa in Kenya are also revolutionizing ways of providing access to consumers in other emerging markets like India. Indeed, emerging markets are leapfrogging landlines and desk-tops to using mobile platforms for mobile commerce (m-commerce). Microfinance, another way of increasing reach for financial products, is also discussed in Chapter 7.

Chapter 8, “Building Brand Identity,” addresses the complexities of communicating with consumers in emerging markets. Although multinationals are well-versed in creating brand awareness, they often find themselves floundering when their traditional ways of brand communication do not find favor in emerging markets, such as when content clashes with the local culture, beliefs, and sentiment. Low literacy rates and limited or no access to media further complicate communication. This chapter examines ways in which companies have successfully created awareness about their product catego-ries and increased knowledge about their brands in order to build a strong brand identity. Specifically, we focus on leveraging the source of communication, customizing the messaging, and evaluating the use of either traditional or new channels. Unbranded products can be infused with value by modernizing the packaging as Haldiram’s did in India, successfully branding traditional snacks and sweets that had previously been largely sold as commodities. Using celebrities to build credibility is also a way to leverage the power of communication.

Emerging markets have large youth segments, which companies target using multiple touch points. For example, Micromax, a mobile phone handset manufacturer, positioned itself on innovation and speed, and used music, movies, and cricket, which resonate well with young Indians. Companies can tap many consumers’ aspirations, such as for luxury or status (e.g., Buick in China) and beauty (e.g., L’Oréal in India). Media choice is also critical. For example, rural audiences may be best reached by indigenous media, such as wall paintings or street theater, but for young, urban populations, new media, such as WeChat in China, is appropriate.


Chapter 9 is appropriately titled “Engaging Stakeholders.” Although creating brand awareness increases consumers’ knowledge about the brand itself, an equally, if not more important criteria for success in emerging markets is for the brand to become part of the social, economic, and environmental successes of those countries by demonstrating concern for all stakeholders. Paying attention to the triple bottom line (i.e., people, planet, and profit) is an important way of managing varied stakeholder needs, and it helps companies become a causal part of the success stories of these countries rather than outsiders that merely benefit from opportunities that emerging markets offer.

Education is an important way of managing stakeholder relation-ships. While companies may need to educate consumers about how or why to use a product/brand, they may also need to educate them about modern sanitary habits, health-conscious consumption, and the envi-ronmental impact of consumption. This paves the way for increased brand awareness and also for a more vibrant and sustainable com-munity. Such efforts are typically more successful when community members and leaders are also involved. Many pharmaceutical compa-nies like GlaxoSmithKline in Africa and Latin America, and DuPont in India are engaging such stakeholders.

Co-opting employees and suppliers can help create new ways of creating awareness and preference. This is especially true when traditional media may not have the desired reach in large parts of the country. Establishing manufacturing and supply-chain partners is also an important part of stakeholder management. For example, Nestlé trained farmers, built schools, provided clean drinking water, and even partnered with the government and other organizations to tackle the problem of child labor. Stakeholders also include policy makers and community leaders who can be valuable partners. For example, Microsoft’s Partnerships for Technology Access (PTA) ini-tiative is developing a model for creating strategic technology alli-ances among different public and private stakeholders. In Chile, PTA has created a public-private partnership called Mipyme Avanza (translation: my small business grows) to enable small businesses to buy their first computers. Internet and business software is provided by partners such as Microsoft, Intel, and Olidata. Similarly, for-profit


and nonprofit companies often collaborate. Thus, this chapter focuses on the various ways that companies can do well by doing good.

Finally, in Chapter 10, “Connecting the Dots,” we combine our learning from global cases and conceptual framework to summarize how you can use our eight strategies built around the 4 A’s framework. In particular, this chapter details how these strategies help address the inherent challenges that companies face in emerging markets. These are summarized in Table 1 in Chapter 10. We also take this opportunity to encourage you to promote mindful consumption as you implement your business strategy. This book plugs the knowl-edge gap in our understanding and practice of marketing with how to compete in emerging markets by offering a strategic marketing toolkit that managers can deploy in complex, heterogeneous markets.

AWARENESS ACCEPTABILITY

ACCESSIBILITY AFFORDABILITY

CHAPTER 9Engaging

Stakeholders

CHAPTER 2Creating Functional

Fusion

CHAPTER 1ConvertingNonusersto Users

CHAPTER 6Managing Reach

CHAPTER 5Upscaling the Offer

CHAPTER 3DesigningCulturalFusion

CHAPTER 8Building

BrandIdentity

CHAPTER 4Democratizing

the Offer

CHAPTER 7Reinventing

Reach

Figure 1: Breakout Strategies for Emerging Markets


Globalization was once about the dominance of Western culture and concepts and glocalization was about making adaptations for local sensibilities. Breakout strategies transcends its predecessors because it adapts to the new world view by acknowledging the impact of free trade and technology, and social networks that are increasingly weav-ing the world together. This new world view combines modernization with old-world culture and urges creative adaptation to resource con-straints faced by large parts of the developing world (Sheth 2011). Not only does this entail leveraging what exists, that is, thinking in the box, but it also introduces what does not exist, that is, thinking out of the box. Hence, this book is aptly titled Breakout Strategies for Emerg-ing Markets: Business Tactics for Achieving Market Growth. We endeavor to help you think differently in order to market differently.

References

Atsmon, Yuval, Peter Child, Richard Dobbs, and Laxman Narasim-han. 2012. “Winning the $30 Trillion Decathlon: Going for Gold in Emerging Markets.” McKinsey Quarterly. August. Accessed on August 8, 2012. www.mckinsey.com/business-functions/strategy- and-corporate-finance/our-insights/winning-the-30-trillion-decathlon-going-for-gold-in-emerging-markets.

Ball, Donald A. 2003. International Business: The Challenge of Global Competition. Boston: McGraw-Hill/Irwin. 478.

Lorenzetti, Laura. 2015. “Here’s How Many People Became Mil-lionaires Last Year.” Fortune. June 17. Accessed on February 14, 2016. http://fortune.com/2015/06/17/millionaires-worldwide.

Nisen, Max. 2012. “Coke CEO Muhtar Kent Perfectly Sums Up Why the Future Is Outside the US.” Business Insider. October 1. Accessed on December 7, 2012. www.businessinsider.com/why-the-future-is-outside-the-us-2012-10.

Prahalad, C.K. 2006. Fortune at the Bottom of the Pyramid: Eradicat-ing Poverty Through Profits. India: Dorling Kindersley Pvt Ltd.

http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/winning-the-30-trillion-decathlon-going-for-gold-in-emerging-markets



http://fortune.com/2015/06/17/millionaires-worldwide

http://www.businessinsider.com/why-the-future-is-outside-the-us-2012-10

http://www.businessinsider.com/why-the-future-is-outside-the-us-2012-10


Sheth, Jagdish N. 2007. “Climate, Culture, and Consumption: Con-necting the Dots.” The Twelfth Distinguished Faculty Lecture, Emory University. February 6.

———.2011. “Impact of Emerging Markets on Marketing: Rethink-ing Existing Perspectives and Practices.” Journal of Marketing 75: 166–182.

Sheth, Jagdish N., Nirmal Sethia, and Shanthi Srinivas. 2011. “Mind-ful Consumption: a Customer-Centric Approach to Sustainabil-ity.” Journal of the Academy of Marketing Science 39: 21–39.

Sheth, Jagdish N., and Rajendra S. Sisodia. 2012. The 4 A’s of Market-ing: Creating Value for Customers, Companies, and Society. New York: Routledge.

Silverstein, Michael J., Abheek Singhi, Carol Liao, and David Michael. 2012. The $10 Trillion Prize: Captivating the Newly Affluent in China and India. Boston: Harvard Business Review Press.

Strizhakova, Yuliya, Robin A. Coulter, and Linda L. Price. 2012. “The Young Adult Cohort in Emerging Markets: Assessing Their Glocal Cultural Identity in a Global Marketplace.” International Journal of Research in Marketing 29: 43–54.


Index

Numbers2 .4 GHz chip, 91–924 A’s of Marketing

benefits, 5and breakout strategies, 6elements of, 4–5strategies related to, 13

4 P’s (product, pricing, place, promotion), 156, 197

27 MHz chip, 91

Aacceptability

breakout strategies, 200–201creating, 6, 199cultural and psychological factors, 7in diagram, 13explained, 4, 18

accessbuilding for, 110–114, 205increasing, 9–10

accessibilitybreakout strategies, 202–203in diagram, 13explained, 4, 9–10providing, 6, 100

Acquired Immune Deficiency Syndrome (AIDS), 63, 155

adidas Group, 184affluent class, 9, 63affordability

achieving, 8, 60–61, 70

breakout strategies, 200–201and democratizing offers, 57–58in diagram, 13explained, 4significance of, 9strategies for, 6

Africaautomatic teller machines

(ATMs), 10, 133GlaxoSmithKline, 12, 179Mo Ibrahim, 73Proctor & Gamble (P&G), 190second-hand markets, 70Unilever, 189

agribusiness in Argentina, 117–118agricultural products, 183Agro Tech Foods Ltd (ATFL),

90–91air conditioning, 19Airlicium, 21Airlines from the Middle East, 87–88Albala, Alberto, 41Alchemist, 155alcohol consumption, 45Alibaba in China, 9, 11, 93,

130–131, 205Always brand, 190Anacin analgesic, 41Anderson, Paul, 85apartheid, 66Arab world, consumption of gold

jewelry, 103

225


Argentina, 8Grupo Los Grobo, 10, 117–118healthcare options, 61Microsoft partnership, 188

Arvind Limited, 166Arzel, Pieree-Yves, 163Asia, skin types and hair texture, 6Asian Infrastructure Development

Bank (AIIB), 138Asia-Pacific region, 9aspirations of consumers, tapping

into, 11Association of Microfinance

Institutions of Uganda (AMFIU), 152–153

ATMs in Africa and India, 10, 133, 136, 205

automobiles, 60Avon, 113, 182awareness . See also brand awareness

breakout strategies, 202–203creating, 6, 11–12in diagram, 13explained, 5, 149

Ayurvedic formulations, 42

BB2B (business-to-business), 11B2C (business-to-consumer), 11, 72Bachchan, Aishwarya Rai, 163Backstreet Boys, 75BaNCS technology, 66Bangladesh

pyramidal banking structure, 138–139

village phones in, 72–73banking and capital markets, 29–31 .

See also Capitec Bank in South Africa; Islamic banking; kitty parties; Sberbank of Russia

Bayer, 41bazaars, 10beauty, aspirations for, 11, 21, 162Bend It Like Beckham, 44

benefits, adding, 9benefits and services, enhancing, 207BHP Billiton, 25Bitature, Patrick, 151Boey, Aaron, 69Boland Bank, 66Bollywood and Hollywood,

blending, 44Bonga Points programs, 86BoP (bottom-of-the-pyramid), 1–2,

8, 57Boston Consulting Group (BCG)

study, 93brand awareness, building via word of

mouth, 166 . See also awarenessbrand identity, building, 149–150,

202–203, 205brand lifecycle, reversing, 9,

89–92, 207brand stories . See also story-telling

approachAirlines from the Middle East, 87–88Alibaba in China, 130–131Automatic Teller Machines in

Africa, 133Blending Hollywood and

Bollywood, 44Buick in China, 160–161Capital Markets and Banking in

Emerging Markets, 29–30Capitec Bank in South Africa, 65–67Celebrity Advertising for Lux,

154–155Chit Funds in India, 73–74Coca Cola in China, 176–177The Coca-Cola Company in India,

104–105CR Vanguard in China, 127–129Disneyland and Starbucks in China,

39–40Door-to-Door Selling in Brazil, 182Dow Chemical Company in Ghana,

183–184DuPont’s Solae in India, 180

inDex 227

E Health Point in India, 109–110Esquel in China, 185Financial Education Program in

Uganda, 151–153Ford Motor Company in the Middle

East, 85Foreign Brands in China, 93–94Gillette in India, 59–60GlaxoSmithKline in Africa and Latin

America, 179GlaxoSmithKline in Latin

America, 64Gold Souk in Dubai, 103–104Grupo Los Grobo in Argentina,

117–118Habitat for Humanity in Thailand,

19–20Halaal Foods, 112–113Haldiram in India, 156–157IKEA in China, 161–162Islamic Banking in Emerging

Markets, 48–49KFC (Kentucky Fried Chicken) in

China, 50–51Levi Strauss’s Denizen Jeans from

China, 69–70LINE’s M-Commerce in Thailand,

134–135Living Goods in Uganda, 114L’Oréal in China, 163L’Oréal’s Multicultural Teams, 25–26Luxury Brands in Emerging

Markets, 115–117Manheim in China, 71–72Maver in Chile, 40–42Microfinance in Emerging Markets,

139–140Micromax in India, 158–159Microsoft in Latin America, 187–188Mobile Payments in India, 135–137Neighborhood Stores in Latin

America, 101–102Nestlé in Ghana and Ivory Coast,

186–187

OLX Classifieds in Emerging Markets, 131–132

Overcoming Infrastructural Deficiencies in India, 23–24

Packaging of Moroccan Dates, 83–84Proctor & Gamble (P&G) in

Africa, 190range of, 5Rapoo in China, 91–92Rural Advertising in India, 165–166Safaricom in Kenya, 86–87SANY Heavy Industry Co., Ltd.,

106–107Sberbank of Russia, 107–108Shark Design Studio, 110–111Sistema Ser/CEGIN, 61–63South African Revenue Service,

137–138Sula Wines in India, 45–47Sundrop in India, 89–91Unilever in Africa, 189WeChat in China, 74–75, 168–169

brands . See also Foreign Brands in China; products; unbranded products

beginning in emerging markets, 3–4customer loyalty, 163Marico in India, 22–23positioning based on emotions, 159“upscaling,” 9

BrazilAvon in, 182door-to-door selling, 182L’Oréal in, 21Microsoft partnership, 188neighborhood stores, 101–102

breakout marketing, explained, 3–4breakout strategies, 6, 210–211 . See

also emerging marketsand 4 A’s of Marketing, 6basis of, 4diagram, 13Table 1, 200–203

Buick in China, 160–161


building for access, 110–114business-to-business (B2B), 130business-to-consumer (B2C), 130

CCadbury Schweppes PLC, 6, 21Cameroon, microfinance model, 139cancer of the cervix, 61capital markets and banking, 29–31, 178Capitec Bank in South Africa, 8,

65–67 . See also banking and capital markets

Carrefour, 127celebrities, impact on credibility, 11Celebrity Advertising for Lux,

154–155celebrity endorsements, 75cell phones, 135, 158 . See also mobile

commerceCeltel telecom company, 73cervical cancer, 61Chang, Yaping, 106change, resistance to, 38, 210channel ownership, managing, 10,

114–118, 208channel partnerships, developing,

105–110, 206 . See also partnershipschannels of communication,

164–165, 205 . See also communication sources

child labor, 186–187Chile

as Established RGM, 30–31Maver in, 40–42Mipyme Avanza, 188pharmaceutical drugs in, 40–41

ChinaAlibaba, 130–131, 205Alibaba’s Tmall, 9, 11annual revenue from, 1Buick in, 160–161Coca Cola, 176–177CR Vanguard, 127–129Denizen jeans, 8, 69–70

diabetes, 22Disneyland and Starbucks, 39–40Esquel, 185foreign brands, 93–94high-net-worth individuals, 178IKEA, 161–162KFC (Kentucky Fried Chicken), 7,

27–28, 50–51L’Oréal, 163luxury brands, 94Manheim, 71–72Microsoft’s Partnerships for

Technology Access (PTA), 12Rapoo brand, 9, 91–92retail market, 127SANY Heavy Industry Co., Ltd., 10,

106–107Tencent, 168used-car market, 71–72WeChat, 11, 74–75, 168–169

China Resources Vanguard Co ., 10Chinese people, lactose intolerance,

6, 21Chit Funds in India, 73–74chocolates, reformulation of, 6, 21cholas, 61–63Cholayil personal care, 166Chopra, Priyanka, 154Clark, Tim, 88classifieds, 131–132climate, adapting to, 18–20The Coca-Cola Company

association with positive emotions, 167–168

in China, 176–177in India, 104–105

cocoaadjusting amount of, 6, 21farmers, 186

collaborating with partners, 10collaborative marketing, 190–191College of Agriculture and Consumer

Sciences (CACS), 183Colombia as Transitional RGM, 30

inDex 229

color preferences, 51–52Colossal Kajal, 26, 163communication channels, using,

164–166communication sources . See also

channels of communicationidentifying, 153–157leveraging, 11, 205

communitieseducating, 208engaging, 206and leaders, 12, 179–181

compound annual growth rate (CAGR), 45

consumers . See also mindful consumption

educating, 176–178, 205–206in emerging markets, 17, 208

consumer-to-consumer (C2C), 130coolers in India, 19co-opting process, 184–187, 207corporate social responsibility (CSR),

175, 177corruption, 211–212country of origin, leveraging, 92–94,

207–208CR Vanguard in China, 127–129Craigslist versus OLX, 11, 131creative financing, developing, 72–75,

208 . See also financing solutionsCube air conditioner, 19cultural acceptance of products, 7cultural fusion, 206

designing, 37–38, 200–201, 204examples of, 7explained, 37–38

Cusack, John, 75customer loyalty, 163

DDabur, 42–43Damas, 104dandelion technology, 92Danone (Dannon), 21

Daqui minivan, 160–161democratizing the offer, 8, 57–58,

200–201, 204, 208demographic dividend, 153denim cloth manufacturing, 166Denizen jeans, 8, 69–70Dhamani jewelers, 104diabetes

in Chinese people, 22in Indian people, 22–23

diabetes in India, 22–23Dior Cosmetic boutique, 116Disneyland and Starbucks in China,

39–40Disney’s theme park in Hong Kong, 7disposable income, 8distribution methods, leveraging, 9–10Dobrev, Nina, 75Dolipen deodorant, 41Door-to-Door Selling in Brazil, 182Dow Chemical Company in Ghana,

183–184Dropbox, 74Dubai

airport, 87gold souk, 10, 103–104

DuPont’s Solae in India, 12, 180

EE Health Point in India, 109–110East Dawning, 51e-commerce, 205

Alibaba, 11setting up, 129–132

economic affordability, 8economic barriers, reducing, 208education

of consumers and markets, 176–178, 205–206, 208

and stakeholder relationships, 12Egypt as Transitional RGM, 30eHealthPoint clinics (eHPs), 109Ek Tha Tiger, 44eKOCool pushcart, 105


emerging market multinationals (EMMs), 213

emerging markets . See also breakout strategies

characterizing, 17consumers in, 17entering, 3growth opportunity, 1inadequate infrastructure, 209market heterogeneity, 199, 204–206overcoming challenges, 198shortage of resources, 208–209sociopolitical governance, 206unbranded competition, 207–208varying needs of, 6

employeesco-opting with suppliers, 12educating, 208engaging, 181–184, 209

Eno antacid, 41Esquel in China, 185Established RGMs, 30Etihad Airways, 87–88, 204Eto, Samuel, 155EY (Ernst & Young), 30

FFacebook, 74–75, 168faith, respecting, 47–49, 206feng shui, 7Fiat, 60Fiesta and Focus, 85Financial Education Program in

Uganda, 151–153financing solutions, creating, 8, 138–

140, 209 . See also creative financingFirms of Endearment, 175flu, treatment in Chile, 41–42food

additives, 28companies, 6–7

Ford Motor Companyand Fiat, 60in the Middle East, 85, 204

Foreign Brands in China, 93–94 . See also brands

franchises, 114–115Frontier RGMs, 30Fruit Tree Productivity Project, 83functional fusion, creating, 17–18, 37,

199–201, 206, 209

GGarnier Fructis shampoo, 26, 163Gaur, Sanjaya S ., 111General Electric (GE), 8Genesis Analytics, 151–152genetic differences, considering,

21–23, 199Ghana

Dow Chemical Company in, 183–184

Nestlé in, 186–187Unilever partnership, 189

Gillette in India, 59–60Girl Child Network, 190GlaxoSmithKline (GSK), 8, 12, 41

in Africa and Latin America, 179vaccine in Latin America, 64

globalization and glocalization, 14“going global,” 2–3Gold Souk in Dubai, 10, 103–104Gomez, Selena, 75Goneos-Malka, Amaleya, 137Google, 75Grameen Bank (GB), 138–139Grandhi, Balakrishna, 85Grinda, Fabrice, 131Grobocopatel, Gustavo, 117Gronda, Jorge, 61–62Grupo Los Grobo in Argentina, 10,

117–118Gulf Standard, 112–113

HHabitat for Humanity (HFH), in

Thailand, 19–20hair care market, 21

inDex 231

halaal-compliant products, 47, 112–113, 205

Haldiram in India, 11, 156–157haram, 48hawala, 135health and wellness, 21, 163Health Education Africa Resource

Team (HEART), 190healthcare options, 63

in Argentina, 8, 61in Uganda, 114

HealthPoint Services India (HSI), 109–110

HERO partnership with P&G, 190hiba, 48high-net-worth people, 9Hindustan Unilever Limited (HUL),

22, 105–106, 189 . See also UnileverHinglish, 44Hollywood and Bollywood,

blending, 44Hong Kong, Disney’s theme park, 7horizontal retailing chains, 126Huawei, 89

IIKEA, 7, 28–29

in China, 161–162and cultural fusion, 38

Inca Kola, 27income pyramid, 8–9India

ATMs, 10Chit Funds, 73–74The Coca-Cola Company, 104–105consumption of gold jewelry, 103cooking oil market, 90–91coolers, 19Cube air conditioner, 19diabetes, 22–23Dupont’s Solae, 12, 180Gillette in, 59–60Haldiram, 11, 156–157impact of climate on, 6

Marico, 22–23, 199Micromax, 158–159mobile payments, 135–137overcoming infrastructural

deficiencies, 23–24rural advertising in, 165–166Shark Designs, 111snack food market, 156–157Sula Wines, 7, 45–47Sundrop cooking oil, 9, 89–91, 163

India, annual revenue from, 1Indian Rupees (INR), 59indigenous channels, 10, 70, 102–105Indonesia as Transitional RGM, 30–31Industrie Forum (IF) Design

awards, 92infrastructural limitations, overcoming,

23–24, 199, 201, 203, 209inside-out product-centric approach, 4International Monetary Fund

(IMF), 138Internet population, 168Islam, growth of, 112Islamic banking, 7–8, 48–49 . See also

banking and capital marketsItaly, Piaggio, 21, 24ITC Limited, 89–90Ivory Coast, Nestlé in, 186–187

JJahazi, Okoa, 86Jain, Vikas, 158

KKa, Ford, 60Kadak Chaap tea, 166Kaif, Katrina, 163Kellogg’s, 22Kent, Muhtar, 1, 104Kenya

M-Pesa, 11as RGM (rapid growth market), 30Safaricom, 86–87, 136Unilever partnership, 189


keyboard and mouse dealers, 91–92KFC (Kentucky Fried Chicken) in

China, 7, 27–28, 50–51Kidd, Tomás Andrés, 61, 117kiosks, 10Kitadol, 41kitty parties, 73–74 . See also banking

and capital marketsKraft, 49–50Kun, Chen, 75

LLa Roche-Posay skin care, 21labeling and packaging, 28Laboratorio Chile, 41lactose intolerance in Chinese, 21languages . See local languagesLatin America, 8

GlaxoSmithKline (GSK), 12, 64, 179microfinance, 139Microsoft, 187–188neighborhood stores, 101–102online retail sales, 129–130

Lazarus, Shelly, 213Levi Strauss & Co ., 8, 69–70Lifebuoy soap, 189LINE’s M-Commerce in Thailand,

134–135LinkedIn, 74literacy rates, 11Living Goods in Uganda, 114local brands, preferences for, 81local companies

impact on, 212–213partnering with, 110

local context, being relevant in, 153local essence, incorporating, 24–

28, 199local languages, using, 43–44local norms, adjusting to, 212local sensibilities, adapting to, 14Logitech, 92L’Oréal

in Brazil, 21, 25–26

in China, 163multicultural teams, 25–26

Louis Vuitton, 104, 115–117love and romance, allure of, 161low-income consumers, needs of, 8low-priced products, demand for, 9Lux, celebrity advertising for, 154–155luxury market, 9, 11, 65, 87, 94, 115–117LVMH French luxury goods, 65, 116

M“Made in USA” versus “Made in

China” products, 93Malaysia as Established RGM, 30Manheim’s used cars, 8, 71–72Mann Deshi Bank, 139Maotai, 94Marhaba Jewellery, 104Marico in India, 22–23, 199Mariwala, Harsh, 22–23market heterogeneity, 199–200,

204–206marketing

eliminating guesswork from, 5foundations and practice, 2success of, 5

markets, educating, 176–178, 205–206, 208

Masan Group, 83MasterCard Foundation, 151–152Maver in Chile, 40–42Maybelline, 26, 163McDonald’s, 47, 50, 52, 159McKinsey & Company, 108m-commerce, 11, 134–135media choices, 11, 167–169, 205, 207megacities, 99menus, adapting to local palates, 7messages, delivering, 153–154messaging, customizing, 11, 157–164metric system, 28Mexico

as Established RGM, 30neighborhood stores, 101–102

inDex 233

Mi Tienda program, 102microentrepreneurs, 114Microfinance in Emerging Markets,

139–140Microfinance Opportunities, 151–152Micromax in India, 11, 158–159Microsoft

in Latin America, 187–188partnership with Nokia, 191Partnerships for Technology Access

(PTA), 12middle class, 9, 63Middle East

Airlines from, 87–88Ford Motor Company in, 85souks, 103–104

mindful consumption, 213–215 . See also consumers

Mipyme Avanza partnership in Chile, 12, 188

mistrust, overcoming, 180–181Mo Ibrahim in Africa, 73mobile commerce, 11mobile payments in India, 135–137mobile phones, 135, 158mobile vans, 10MoMaths app, 191Mombasa-Nairobi rail link, 110money, lending, 73–74Monsoon Wedding, 44Moroccan dates, packaging, 9,

83–84, 204mouse and keyboard dealers, 91–92M-Paisa in India, 136M-Pesa in Kenya, 11multicultural teams, 25–26multinational corporations (MNCs),

150, 212Muslim population, 112–113

NNairobi-Mombasa rail link, 110Namibia, health education in, 190NANO receiver, 92

Nedbank, 66neighborhood stores in Latin America,

101–102Nel, Charles, 66–67Nestlé, 12, 182, 186–187Nigeria as RGM (rapid growth

market), 30Nike, 184Nokia, 24, 89, 191noneconomic obstacles, overcoming,

65–67, 208nongovernmental organizations

(NGOs), 105, 190nonprofit companies, developing

partnerships with, 187–191nonusers, converting to users, 4, 8Novartis Laboratories, 41

OOLX Classifieds in Emerging Markets,

11, 131–132online payment systems, 11online retail sales, 129–130opinion leaders, engaging, 206Oreo cookies, 49–50outside-in customer-centric approach, 4overconsumption, 214Oxenford, Alec, 131Oxigen outlets, 136

Ppackaging

adding or changing, 82–84importance of, 9and labeling, 28modernizing, 11Moroccan dates, 83–84, 204and upscaling offers, 207

Pan American Health Organization (PAHO), 64

Panadol, 41papad, 156partners, collaborating with, 10,

12–13, 187–191


partnerships, developing with companies, 187–191, 208 . See also channel partnerships

Partnerships for Technology Access (PTA) initiative, 187–188

payment methods, 209payments, enabling, 133–138, 205Pels, Jacqueline, 61, 117Pepsi, 177pharmaceutical companies, 12, 40–41Piaggio, 21, 24policy makers, 12Popularly Positioned Products (PPP),

182, 186positioning, 9, 84–85, 207preference, creating, 12prices, rise in, 9pricing, thinking creatively about, 74private companies, developing

partnerships with, 187–191Proctor & Gamble (P&G), 22, 59–60,

126, 190product awareness, building,

202–203, 205product knowledge, establishing,

150–153product value, extending, 70–72products . See also brands; unbranded

products; web-based productsadapting, 17–18adding benefits, 9availability, 9–10convenience of access, 10extending life of, 70low prices, 9“Made in USA,” 93making culturally acceptable, 7managing throughout lifecycles, 8native conceptualizations, 49positioning, 9profitability, 58upscaling, 88

profitability of products, 58Project Shakti, 105

psychological acceptabilityimportance of, 7lack of, 7

psychological acceptance, 37psychological affordability, 8public companies, developing

partnerships with, 187–191public-private partnership (PPP),

187–191, 206purchase

overcoming noneconomic obstacles to, 65–67

reducing economic barriers to, 59–65

Pureit water purifiers, 189pushback, getting from customers, 211pushcart vendors, 10PYXERA Global, 183–184

QQatar, 87Quaker Oats, 22quality standards, raising, 25Quantico, 154

RRaghuthman, Anudeep, 85Rapoo brand in China, 9, 91–92razor market, 59–60reach

managing, 99–100, 202–203, 205, 208–209

reinventing, 125–126, 202–203, 208–209

Rebiazina, Vera, 107Red Bull, 52regulatory requirements

aligning to, 28–31negotiating, 7, 206

research and development (R&D)breakthrough drugs, 63clothing industry, 69conducting, 18East Dawning, 51

inDex 235

establishing, 52rethinking, 17–18as source of future revenue, 63–64

resources, shortage of, 201, 203, 208–209

retailingconceptualization of, 10modernizing, 126–129

reverse innovation, 8, 68–70, 208reversing brand lifecycle, 9,

89–92, 207RGM (rapid growth markets), 30Richer, Peter, 137–138Rishi, Meghna, 111romance and love, allure of, 161Ruf & Tuf jeans, 166rural advertising in India, 165–166rural penetration, 113Russia, Sberbank, 10

SSABMiller, 27Safaricom in Kenya, 86–87, 136Samant, Rajeev, 46–47Sam’s Club, 102Samsung, 89SANY Heavy Industry Co ., Ltd ., 10,

106–107Saudi Standard, 112–113Sberbank of Russia, 10, 107–108 .

See also banking and capital markets

self-help groups (SHGs), 105self-service technologies (SSTs),

132–133, 205 . See also technologysensory preferences, understanding,

49–52, 204services

adding, 9and benefits, 86–88, 207making culturally acceptable, 7upscaling, 87

Shanghai-Hong Kong Stock Connect program, 29–30

Sharia law, 48–49, 112Shark Design Studio, 110–111, 205Sharma, Piyush, 89, 134Sharma, Rahul, 158Sina Weibo, 168Singh, Atul, 105Singh, Jyothsna Appaiah, 85Singh, Rahul, 158Sistema Ser/CEGIN, 8, 61–63skin care products, 21Slumdog Millionaire, 44, 204small- and medium-sized enterprises

(SMEs), 37snacks and sweets, branding, 11,

156–157Snoop Dogg, 159social media, 168social norms, considering, 45–47, 206sociopolitical governance, 200, 206souks in Middle East, 103–104South Africa

Capitec Bank, 65–67as Established RGM, 30unsecured credit in, 8

South African Revenue Service (SARS), 10, 137–138, 177–178

soy protein, 180stakeholders

engaging, 175–176, 202–203, 205–206, 209

managing relationships, 12standards of living, rise in, 3Starbucks, 39–40, 160statistics related to consumption, 1–2status, aspirations for, 11story-telling approach, using, 5 . See

also brand storiesstrategies . See breakout strategiesstreet markets, 10subcompact automobiles, 60Sula Wines in India, 7, 45–47sunblock, 21Sunburn festival, 159Sundrop cooking oil, 9, 89–91, 163


suppliersco-opting, 184–187, 207co-opting with employees, 12educating, 208

supply chain management software (SCMS), 128

TTampax brand, 190Tapsin flu medication, 41–42tariff barriers, 28Tata Consultancy Services (TCS), 66technology . See also self-service

technologies (SSTs)alliances, 12, 187–188dandelion, 92using, 10

technology-driven supply chains, 99Tencent in China, 74–75, 168Tesco, 127Thailand

Habitat for Humanity (HFH) in, 19–20

m-commerce, 134–135Tiësto, DJ, 159Tmall Global, 93touch points, 11Toyota, 89traditional channels

adapting to, 100–102, 164–166of communication, 205

traditions, incorporating, 39–43, 204Transitional RGMs, 30triple bottom line, 12Turkey as Established RGM, 30–31Twitter, 74–75, 168

UUganda

financial education program, 151–153Living Goods, 114

unbranded competition, 201, 203, 207–208

unbranded products, adding value to, 11, 81 . See also brands; products

UNICEF, 155Unilever, 2, 189 . See also Hindustan

Unilever Limited (HUL)United Arab Emirates (UAE), 87unsecured credit, availability in South

Africa, 8upscaling

offers, 81–82, 200–201, 204products, 88services, 87

U .S ., percentage of world population in, 1

used goods, sale of, 8used-car market in China, 71–72users, converting nonusers to, 4, 8

Vvaccines, 8, 64vending machines, 10Vespa motor scooters, 24Vietnam

population of, 83as RGM (rapid growth market), 30

Vodacom of the United Kingdom, 86Vodafone, 136, 181

Wwall paintings, 166Walmart, 102, 127washing machines, 6water purifiers, 189wealthy segments, 9web-based products, growth of, 74 . See

also productsWeChat in China, 11, 74–75, 168–169Western products, exposure to, 3Whirlpool Corporation, 6, 23–24Williams, Sam, 154word-of-mouth strategy, 166World Bank, 138Wyeth’s products, 64

inDex 237

YYan, Jun, 50, 91youth segments, 11Yunus, Muhammad, 138

ZZeng, Hao, 91Zeta-Jones, Catherine, 155Zolben, 41

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